3. Narrow Your Choices By Asking The Right Questions
Visit NerdWallet’s credit card comparison tool and search for the type of credit card you’re looking for, filtering results according to your credit score and monthly spending. As you go through the top picks, consider these questions.
For Student And Secured Cards:
- Will this card help me build my credit? Look for a card that reports your credit card payments to the three major credit bureaus. Many secured cards don’t do this.
- How much does it cost to open an account, including the annual fee? The rewards on these cards generally aren’t high enough to warrant an annual fee. Unless you have very poor credit, you can likely avoid this expense. For secured cards, the lower the security deposit, the better, although your credit limit may be tied directly to how much of a deposit you make.
- Can I graduate to a better card later on? Choose a card that will let you build your credit and upgrade to a card with more competitive terms. This makes it easier to leave your card open longer, boosting your average age of accounts in the long run.
For Low-Interest, 0% Apr Or Balance Transfer Cards:
- How long is the 0% APR period, and what is the ongoing interest APR? Look for a card that gives you enough time to pay off your debt interest-free. If you’re planning on carrying balances over several years, consider a credit card with a low ongoing APR.
- What is the card’s balance transfer policy? If you’re doing a balance transfer, look up a card’s balance transfer fees. Find out what types of debt you can transfer and whether there’s a limit to how much you can move over. Note that the balance transfer APR on a card may be different from the purchase APR.
- Does the card offer rewards? If you’re looking for only a few months of 0% APR — perhaps instead of a sign-up bonus — you may be able to find a card that doles out generous ongoing rewards as well.
For Rewards, Travel Or Cash-Back Cards:
- How do I spend my money? Look for a card that delivers the highest rewards for the categories you spend the most on. If you’re a big spender, consider getting a card with an annual fee, if your rewards earnings would offset the cost. If you’re planning to use the card abroad, look for one with no foreign transaction fees and chip-and-PIN capability, rather than the chip-and-signature technology that’s standard in the U.S. This goes for other types of cards too.
- How complicated is this credit card? If you don’t want to contend with limited award seat availability, spending caps, rotating bonus rewards and loyalty tiers, consider a card with flat-rate cash-back rewards.
- How quickly will I earn rewards, and how much are they worth? Read NerdWallet’s rewards valuations to find the answers to these questions.
